Millions Rely On Fictional Mortgage Benefit

The Misconception About State Benefits and Mortgage Repayments

A concerning trend has emerged among homeowners, with around 3.85 million individuals believing in a non-existent state benefit that will help them keep up with mortgage repayments in the event of losing their income.

Misunderstanding Government Assistance

According to recent research, almost one in ten homeowners mistakenly believe that the government will cover their mortgage payments if they are unable to do so due to reasons like redundancy or illness. This belief is false, as the government does not provide mortgage payment assistance for the first nine months of unemployment. Moreover, any assistance after this period is only available to a select group of people with mortgages under £100,000.

Adding to this misconception, seven percent of those surveyed by Lincoln Financial Group were unsure about the availability of government assistance, unaware that state aid for mortgage payments was abolished by the Conservative government in 1995.

False Sense of Security

Ian Noble, head of strategic partnerships at Lincoln Financial Group, warns that millions of Britons are living under a false sense of financial security, wrongly believing that the government will step in to help with their mortgage payments if needed. "The government is not going to pay for your mortgage if you lose your job, and assuming that it will place people in real danger is a large risk as it suggests they have no other mortgage protection plan in place," said Mr. Noble.

Rising Repossessions

This misconception is particularly troubling given the rising number of mortgage repossessions. In England and Wales, the first three months of 2006 saw a dramatic 57 percent increase in repossession orders, indicating a growing issue.

The Importance of Mortgage Protection Plans

The reality is that homeowners must not rely on the government for mortgage assistance in times of financial difficulty. Instead, it is crucial to have a robust mortgage protection plan in place. This proactive approach will provide a safety net and help prevent the risk of losing one's home due to unforeseen circumstances such as job loss or illness.

In summary, the belief that the government will cover mortgage payments in times of need is a dangerous misconception. Homeowners should take steps to secure their financial future by investing in appropriate mortgage protection plans.